REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 2617 of 2018 (Arising out of SLP(C) No. 18845/2013)

SUNIL B. NAIK ….Appellant

versus

GEOWAVE COMMANDER ..…Respondent

And:

CIVIL APPEAL No. 2618 of 2018 (Arising out of SLP(C) No. 18899/2013)

J U D G M E N T

SANJAY KISHAN KAUL, J.

1. Leave granted.

2. A maritime claim against the charterer of a ship, who is not the

de jure  owner of the ship, and the endeavor to recover that amount

through a restraint order against the ship owned by a third party has

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given rise to the present appeal.

3. Oil and Natural  Gas Corporation Limited (for short  ‘ONGC’)

awarded a contract to one Reflect Geophysical Pte. Ltd., Singapore (for

short ‘Reflect Geophysical’) for carrying out seismic survey operations

off the coast of Gujarat near the Okha Port in the year 2012.  In order

to facilitate the carrying out of its obligations, Reflect Geophysical in

turn  entered  into  a  Charter  Party  Agreement  vide  contract  dated

29.6.2012 to charter the vessel ‘Geowave Commander’, the registered

owner being Master and Commander AS Norway,(for short ‘Geowave

Commander’) for a period of three years.  The said vessel is stated to

be a specialized ship equipped to carry out seismic survey operations.

In terms of the said contract, it is defined as a ‘Bareboat Charter’.  The

charterer also has the option to purchase the vessel and the owners’

seismic  equipment  provided  the  purchase  option  is  declared  by  the

charterers  to  the  owners  in  writing  latest  on  18.1.2015  being  six

months prior to the end of the charter period.

4. In  order  to  fully  appreciate  the  terms  of  the  charter,  it  is

necessary  to  discuss/reproduce  some  of  the  clauses  of  the  Charter

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Agreement:

“10. Maintained and Operation

(a)(i) Maintenance and Repairs: - During the Charter Period the Vessel shall be in the full possession and at the absolute disposal for all purposes of the Charters and under their complete control in every respect.  The Charterers shall maintain the Vessel, her machinery, boilers, appurtenances and spare parts in a good state of repair.  In efficient operating condition and in accordance with good commercial maintenance practice and except as provided for in Clause 14(1) if applicable at their own expense they shall at all times keep the Vessel’s class fully upto date and free of overdue  recommendations  and/or  conditions  with  the classification.”

xxxx xxxx xxxx xxxx xxxx

“(ii) New Class and Other Safety Requirements – In the event of any  improvement,  structural  changes  or  new  equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements or by compulsory legislation costing (excluding the Charterer’s loss of time) more than the percentage stated in Box 23 or if Box 23 is left blank, 5 per cent of  the  Vessel’s  insurance  value  as  stated  in  Box  29  then the extent, if any, to which the rate of hire shall be varied and the ratio in which the cost of compliance shall be shared between the  parties  concerned  in  order  to  achieve  a  reasonable distribution thereof as between the Owners and the Charterers having regard,  inter alia to the length of the period remaining under this Charter shall, in the absence of agreement, be referred to dispute resolution method agree in Clause 30.

(iii)  Financial Security: The Charterers shall maintain financial security or responsibility in respect of third party liabilities as required by any government including federal state or municipal or  other  division  or  authority  thereof  to  enable  the  Vessel without penalty or charge, lawfully to enter, remain at or leave

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any port, place territorial or contiguous waters of any country, state or municipality in performance of this Charter without any delay.   This  obligation  shall  apply  whether  or  not  such requirements have been lawfully imposed by such government or division or authority thereof.  The Charterers shall make and maintain  all  arrangements  by  bond  or  otherwise  as  may  be necessary  to  satisfy  such requirements  at  the  Charterers’ sole expenses and the Charterers shall indemnify the Owners against all  consequences  whatsoever  (including  loss  of  time)  for  any failure or inability to do so.

(b)  Operation of the Vessel: The Charterers shall  at  their own expense and by their own procurement man, victual, navigate, operate,  supply fuel  and whenever  required,  repair  the Vessel during the  Charter  Period and they shall  pay all  charges  and expenses of every kind and nature whatsoever incidental, to their use  and  operation  of  the  Vessel  under  this  Charter,  including annual  flag  State  fees  and  any  foreign  general  municipality and/or state taxes.  The master officers and crew of the Vessel shall  be  the  servants  of  the  Charterers  for  all  purpose whatsoever, even for any reason appointed by the Owners.”

xxxx xxxx xxxx xxxx xxxx

“(d)  Flag and Name of Vessel: During the Charter period, the Charterers shall have the liberty to paint the Vessel in their own colours,  install  and display  their  funnel  insignia  and fly  their own house flag.  The Charterer shall also have the liberty, with the Owners’ and Mortgagee’s prior written consent, which shall not be unreasonably withheld to change the flag and/or the name of  the  Vessel  during  the  Charter  Period.   Painting  and  re- painting,  installment  and  re-installment,  registration  and  re- registration if required by the Owners shall be at the Mortgage(s) bearing on the Vessel  that  would be required as a result  of  a change of  flag initiated by the Charterers shall  be Charterer’s cost.

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(e)  Changes  to  the  Vessel: Subject  to  Clause  10(a)(ii)  the Charterers  shall  make  no  structural  changes  in  the  Vessel  or changes  the  machinery,  boilers,  appurtenances  or  spare  parts thereof  without  in  each  instance  first  securing  the  Owners approval thereof, if the Owners so agree, the Charterers shall, if the Owners so require, restore the Vessel to its former condition before the termination of this Charter.”

…. …. …. …. ….

“11. Hire (a) The charterers shall pay hire due to the Owners punctually in accordance with the terms of this Charter in respect of which time shall be of the essence.”

…. …. …. …. ….

“17. Indemnity

(a) The Charterers shall indemnify the Owners against any loss, damage or expenses incurred by the Owners arising out of or in relation to  the operation of  the Vessel  by the  Charterers,  and against  any lien of  whatsoever  nature arising out  of  an event occurring during the Charter Period.  If the Vessel be arrested or otherwise detained by reason of claims or liens arising out of her operation  hereunder  by the Charterers,  the Charterers  shall  at their own expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including the provision of bail.

Without  prejudice  to  the  generality  of  the  foregoing,  the Charterers  agree  to  the  indemnify  the  Owners  against  all consequences or liabilities arising from the Master, officers or agents signing Bills of Lading or other documents.

(b) If the Vessel be arrested or otherwise detained by reason of a claim or claims against  the Owners the Owners shall  at  their own expenses take all reasonable steps to secure that within a reasonable time the Vessel is released, including the provision of bail.

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In such circumstances the Owners shall indemnify the Charterers against any loss, damage or expense incurred by the Charterers (including hire paid under this Charter) as a direct consequence of such arrest or detention.”

5. Reflect Geophysical entered into a Charter Hire Agreement on

30.10.2012  with  M/s.  Sunil  B.  Naik,  the  appellant  in  SLP(C)

No.18845/2013, in terms whereof the said appellant agreed to supply

24  fishing  trawlers  being  the  chase  vessels  to  assist  in  survey

operations to be conducted by the charterers seismic vessel Geowave

Commander.  The charter was initially for 16 chase vehicles out of 24

fishing trawlers.   The said agreement contained a dispute resolution

clause 18 providing for arbitration, which reads as under:

“18.  All  disputes  arising  out  of  or  in  connection  with  this Charter  Hire  Agreement  shall  be  finally  settled  in  Mumbai under the rules of India Arbitration Act before three arbitrators appointed in accordance with the said Rules.  Each party shall appoint one such arbitrator and the two so appointed by the parties shall jointly appoint the third.”

6. It  is  the case  of  the appellant  that  the 16 vessels  were  made

ready for Reflect Geophysical to ensure that fishing vessels were kept

well clear of the towed in water seismic equipment so that their fishing

equipment is not damaged.  The daily hiring rate, as per the agreement,

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varies  for  the  different  nature  of  vehicles.   The  said  appellant  also

claims  that  the  vessels  were  mobilized  at  Okha  port  but  the  fact

remains that the respondent ship never went to Okha and was at the

Pipavav port from where it went to Mumbai.

7. Similarly  Yusuf  Abdul  Gani,  appellant  in  SLP(C)

No.18899/2013, agreed to give on hire the ‘Orion Laxmi’ to Reflect

Geophysical  to  work  in  support  with  the  survey  vessel  ‘Geowave

Commander’ vide  contract  dated  1.10.2012.   The  purpose  was  to

supply  standby  and  emergency  towing  duties.   The  two  appellants

claim to  have  raised  invoices  on Reflect  Geophysical  from time to

time, which are stated not to have been paid.  Reflect Geophysical also

failed to pay the owners of the respondent vessel and consequently the

owners  gave  a  notice  of  default  dated  4.3.2013  to  the  charterers,

Reflect  Geophysical,  for non-payment of charter hire aggregating to

US$  4,36,790  (approximately  Rs.2.23  crore).   Reflect  Geophysical,

however, filed an application in the Singapore Court for placing the

company  under  judicial  management,  which  was  published  in  a

notification dated 15.3.2013 in the Singapore Gazette.

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8. Sunil B. Naik issued a demand notice to Reflect Geophysical for

payment of outstanding dues on 16.3.2013. Yusuf Abdul Gani is also

said to have raised various invoices to Reflect Geophysical in respect

of the dues arising out of the contract, between 16.11.12 and 16.2.13.  

9. Yusuf Abdul Gani, moved the Bombay High Court by filing a

suit against the respondent vessel as an admiralty suit and obtained an

order  on  15.3.2013  for  arrest  of  the  vessel.   Similarly,  on  Reflect

Geophysical expressing its inability to make payments on account of

lack of funds, Sunil B. Naik, filed an admiralty suit and obtained an

order of arrest of vessel on 12.4.2013. As noted, the vessel was already

under arrest in pursuance of the order passed in Yusuf Abdul Gani’s

case.

10. The owners of the respondent vessel,  Master and Commander

AS  Norway,  filed  a  notice  of  motion  in  the  two  proceedings  for

vacation of the  ex parte arrest of vessel.  On hearing being held, the

learned single Judge on 17.4.2013 vacated the ex parte stay.  The two

appellants,  as  aggrieved  parties,  moved  the  Division  Bench  of  the

Bombay High Court, which dismissed the appeal on 10.5.2013.  That is

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how the present appeals were filed.

11. In  the  present  appeals  while  issuing  notice  on  17.5.2013  an

interim arrangement was made whereby the respondent was directed to

deposit a sum of Rs.1 crore in each case as security before the Bombay

High Court and on such deposit the vessels were permitted to sail.  The

amounts were directed to be kept in fixed deposits.  We were informed

that these amounts were accordingly deposited and are lying in fixed

deposits.  The ship set sail.  The question, thus, would be whether the

appellants are entitled to appropriate this amount along with interest

against their dues or whether the respondent is entitled to release of the

amount so deposited in Court.

The Legal Conundrum:

12. We are faced with the aforesaid factual position where there are

actually three creditors of Reflect Geophysical, being the owners of the

respondent  ship and the appellants,  who entered into contracts  with

Reflect Geophysical to provide assistance in the operation of the task

for which the ship was engaged.

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13. The first question, thus, which would arise is whether a maritime

claim could be maintained under the admiralty jurisdiction of the High

Court for an action in rem against the respondent ship in respect of the

dues of the appellants when the charterer himself is in default of the

payment to the owner.  The case of the appellants, on the one hand, is

that  there  is  a  liability  of  the  respondent  vessel  on  account  of  the

charter agreement and the rights and obligations of the charterer while

the respondent, who has succeeded before both the forums, seeks to

establish that the claim of the appellants cannot be categorized as a

maritime  claim  for  invoking  the  admiralty  jurisdiction  of  the  High

Court and that the vessel, thus, could not be arrested to secure such a

claim of the appellants.

Bareboat Charter:

14. The charter  party is defined as a contract  by which an entire

ship,  or  some principal  part  thereof,  is  let  by the owner  to  another

person for a specified time or use.  The Charter can be of two kinds –

(i) Charter of demise; and (ii) Contract of affreightment.  In the present

case, we are concerned with the charter of demise by which the whole

vessel  is  let  to  the  charterer  with  the  transfer  to  him  of  its  entire

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command and possession and consequent control over its navigation.

Such a charter is called a bareboat charter.  It would be apposite at this

stage to refer to the Mark Davis’ Commentary on “Bareboat Charters”

2nd Edition where the nature and character of demised charters has been

explained as follows:

“A  fundamental  distinction  is  drawn  under  English  law between charter parties which amount to a demise or lease of a ship, and those which do not. The former category, known as charters by demise, operate as a lease of the ship pursuant to which possession and control passes from the owners to the charterers  whilst  the  latter,  primarily  comprising  time  and voyage charters, are in essence contracts for the provision of services, including the use of the chartered ship. Under a lease, it  is  usual  for  the  owners  to  supply  their  vessel  “bare”  of officers and crew, in which case the arrangement may correctly be termed a “bareboat” charter. The charterers become for the duration of the charter the de facto “owners” of the vessel, the master and crew act under their orders, and through them they have possession of the ship.

A statement of the hallmarks of a demise charter can be found in  the  judgment  of  Evans  LJ  in  The  Giuseppe  di  Vittorio [1998] 1 Lloyd’s Rep 136 at p 156:

“What  then  is  the  demise  charter?  Its  hallmarks,  as  it seems to me, are that the legal owner gives the charterer sufficient  of  the rights  of  possession and control  which enable the transaction to be regarded as a letting – a lease, or demise, in real property terms – of the ship.  Closely allied  to  this  is  the  fact  that  the  charterer  becomes the employer  of  the  master  and  crew.   Both  aspects  are combined in the common description of a ‘bareboat’ lease or hire arrangement.”

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As indicated, charter parties which do not amount to a demise or lease of a ship (Including time charters and voyage charters) are  classified  in  English  law  as  contracts  of  affreightment, pursuant to which the owners agree to carry goods by sea in return for  a sum of money.   Although the charterers  have a right as against the owners to have their goods carried on the vessel, the ownership and the possession of the ship remains with the owners through the master and crew who remain their servants.

Whether or  not  a charter  party amounts to a demise charter depends in every case upon the precise terms of the charter, taking  the  instrument  as  a  whole.   The  test  has  been summarized as follows:

“The question depends, where other things are not in the way,  upon  this:  whether  the  owner  has  by  the  charter, where there is a charter, parted with the whole possession and control  of  the  ship,  and to  this  extent,  that  he  has given to the charterer a power and right independent of him, and without reference to him to do what he pleases with regard to the captain, the crew, and the management and employment of the ship.  That has been called a letter or demise of the ship.  The right expression is that it is a parting  with  the  whole  possession  and  control  of  the ship.”

Thus, although time charters almost always contain words such as “let”, “hire”, “delivery” and “redelivery”, the use of such words are inapt in such a context, and are not in any sense to be regarded as conclusive, when determining the nature of the charter.

In Sea and Land Securities v. William Dickinson MacKinnon LJ traced the origin of these words to demise charters, and at page 163 emphasised the difference between demise and time charters thus: “there is all the difference between hiring a boat

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in  which  to  row  yourself  about,  in  which  case  the  boat  is handed over to you, and contracting with a man on the beach that  he  shall  take  you  for  a  row,  in  which  case  he  merely renders services in rowing you about.”

15. A demised charterer, like Reflect Geophysical, who is the owner

for services stipulated, assumes in large measures the customary rights

and liabilities of vessel owners in relation to third persons, who have

dealt  with  him  or  with  the  ship,  illustratively,  repairs  and  supplies

ordered for the vessel, wages of seamen, etc.

Maritime Claims & Admiralty Jurisdiction in India:

16. This Court in  M.V. Elisabeth &Ors. v. Harwan Investment &

Trading Pvt. Ltd.1 had an opportunity to discuss the scope of exercise

of the admiralty jurisdiction and consequently of an action in rem.  The

Admiralty Court Act, 1861, was referred to in this behalf but that was

stated  not  to  inhibit  the  exercise  of  jurisdiction  by the  High Court

subject to its own rules, in exercise of its maritime jurisdiction.  The

fact that the High Court continues to enjoy the same jurisdiction as it

had  immediately  before  the  commencement  of  the  Constitution

(Article 225 of the Constitution of India) was to be read in the context

of the judicial sovereignty of the country manifested in the jurisdiction

1 AIR 1993 SC 1014

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of the High Courts as superior courts, thus, though the colonial statutes

may remain in force, by virtue of Article 372 of the Constitution of

India, that was observed not to stultify the growth of law or blinker its

vision or fetter its arms.  The latter Admiralty Act of 1890 was said not

to incorporate any particular English statue into the Indian law for the

purpose  of  conferring  admiralty  jurisdiction,  but  to  assimilate  the

competent courts in India to the position of the English High Court.

The lack of legislative exercise was noted with regret.  The said lament

apparently has still not had its full impact!

17. The draft Admiralty Act of 1987, did not see the light of the day.

Section 3 of that Act seeks to define the admiralty jurisdiction of the

court.  The fate was no different for the draft Admiralty Act of 1999,

Section 5 of which defines the admiralty jurisdiction.  Finally, we have

The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act,

2017, which was passed by the Parliament and received the assent of

the  President  of  India  on  9.8.2017  and  was  duly  published  in  the

Gazette on the said date but the date of its coming into force has still

not been notified.  Interestingly, the statement of object and reasons of

this Act itself refers to the desirability of the codifying and clarifying

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the admiralty law in view of the observations of this Court in  M.V.

Elisabeth &Ors.2.  The present dispute is, once again, a reminder to the

Government of the necessity of bringing into force the said Act!

18. We may note that these Acts were referred to by Mr. Shekhar

Naphade, learned Senior Advocate appearing for the appellant, Sunil

B.  Naik,  for  purposes  of  elucidating  the  expanding  admiralty

jurisdiction as observed in M.V. Elisabeth &Ors.3.  Thus, Section 3(1)

(h),( j) & (l) of the 1987 Act was referred, which reads as under:

“3. Admiralty Jurisdiction of the Court. – (1) The Admiralty Jurisdiction  of  the  Court  shall  be  as  follows,  that  is  to  say Jurisdiction to hear and determine any of the following questions or claims:

xxxx xxxx xxxx xxxx xxxx

(h)  Any  claim  arising  out  of  any  Agreement  relating  to  the carriage of goods in a ship or to the use or hire of a ship;

xxxx xxxx xxxx xxxx xxxx

(j) Any claim in the nature of towage in respect of a ship or any aircraft;

xxxx xxxx xxxx xxxx xxxx

(l)  Any claim in respect  of  goods,  materials,  bunker  or  other necessaries supplied to a ship for her operation of maintenance.”

2 supra 3 supra

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19. The claim of the appellants was sought to be brought within the

expression “or to use or hire of a ship”.  The same aforesaid clause of

1999 Act was also referred to state that the expression “operation or

maintenance” was specified “operation or maintenance.”  The object, it

was, thus, pleaded, in the expanding jurisdiction was to include any

services rendered to the ship and it was claimed that the appellants had

actually  rendered those  services  in  the  form of  the  agreement  with

Reflect Geophysical.  Insofar as 2017 Act is concerned, the provision

of Section 4(1)(j) & (l) were referred to, which read as under:

“4.  Maritime  claim. –  (1)  The  High  Court  may  exercise jurisdiction to hear and determine any question on a maritime claim, against any vessel, arising out of any –  

xxxx xxxx xxxx xxxx xxxx

(j) towage;

xxxx xxxx xxxx xxxx xxxx

(l)  goods,  materials,  perishable  or  non-perishable provisions, bunker  fuel,  equipment  (including  containers),  supplied  or services rendered to the vessel for its operation, management, preservation  or  maintenance  including  any  fee  payable  or leviable.”

20. In respect of the aforesaid clause (l), once again, it is claimed

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that the appellant rendered services to the vessel for its operation and

management.   Section  6  of  that  Act  also  provides  for  admiralty

jurisdiction in personam in respect of a maritime claim.

21. Mr. Prashant S. Pratap, learned Senior Advocate appearing for

the respondent referred to the same judgment in M.V. Elisabeth &Ors.4

to  emphasise  that  despite  the  expanding  jurisdiction  of  the  courts,

certain  fundamentals  have  to  be  kept  in  mind  as  reflected  in  the

observations made in the said judgment.  As to what is the object of

exercise of jurisdiction in rem and the manner of exercise is discussed

in the following paragraphs:

“44. “The law of admiralty, or maritime law, …. (is the) corpus of rules, concepts, and legal practices governing … the business of  carrying  goods  and  passengers  by  water.”  (Gilmore  and Black, The Law of Admiralty, page 1). The vital significance and the distinguishing feature of an admiralty action in rem is that this  jurisdiction  can  be  assumed by the  coastal  authorities  in respect of any maritime claim by arrest of the ship, irrespective of the nationality of the ship or that of its owners, or the place of business  or  domicile  or  residence  of  its  owners  or  the  place where the cause of action arose wholly or in part.

45.…  In  admiralty  the  vessel  has  a  juridicial  personality,  an almost corporate capacity, having not only rights but liabilities (sometimes  distinct  from those  of  the  owner)  which  may  be enforced by process and decree against the vessel, binding upon all interested in her and conclusive upon the world, for admiralty

4 supra

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in appropriate cases administers remedies in rem, i.e., against the property, as well as remedies in personam, i.e., against the party personally ….” (Benedict, The Law of American Admiralty, 6th ed., Vol. I p. 3.)

46. Admiralty Law confers upon the claimant a right in rem to proceed against the ship or cargo as distinguished from a right in personam to proceed against the owner. The arrest of the ship is regarded  as  a  mere  procedure  to  obtained  security  to  satisfy judgment. A successful plaintiff in an action in rem has a right to recover  damages  against  the  property  of  the  defendant.  “The liability of the ship owner is not limited to the value of the res primarily proceeded against …. An action … though originally commenced  in  rem,  becomes  a  personal  action  against  a defendant upon appearance, and he becomes liable for the full amount  of  a  judgment  unless  protected  by  the  statutory provisions for the limitation of liability”.'  (Roscoe's Admiralty Practice, 5th ed. p. 29)

47. The foundation of an action in rem, which is a peculiarity of the Anglo-American law, arises from a maritime lien or claim imposing a personal liability upon the owner of the vessel.  A defendant in an admiralty action in personam is liable for the full amount of the plaintiff's established claim. Likewise, a defendant acknowledging service in an action in rem is liable to be saddled with full liability even when the amount of the judgment exceeds the value of the res or of the bail provided. An action in rem lies in the English High Court in respect of matters regulated by the Supreme Court Act 1981, and in relation to a number of claims the jurisdiction can be invoked not only against the offending ship in question but also against a ‘sistership’ i.e., a ship in the same beneficial  ownership as the ship in regard to which the claim arose.

“The  vessel  which  commits  the  aggression  is  treated  as  the offender, as the guilty instrument or thing to which the forfeiture attaches, without any reference whatsoever to the character or

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conduct of the owner ….” (Per Justice Story, The United States v. The Big Malek Adhel [43 US (2 How) 210, 233 (1844)] ).

xxxx xxxx xxxx xxxx xxxx

59. The real purpose of arrest in both the English and the Civil Law systems is to obtain security as a guarantee for satisfaction of  the  decree, although  arrest  in  England  is  the  basis  of assumption of  jurisdiction,  unless the owner  has submitted to jurisdiction. In any event, once the arrest is made and the owner has entered appearance, the proceedings continue in personam. All actions in the civil law — whether maritime or not — are in personam, and arrest of a vessel is permitted even in respect of non-maritime  claims,  and  the  vessel  is  treated  as  any  other property of the owner, and its very presence within jurisdiction is  sufficient  to clothe the competent  tribunal  with jurisdiction over  the  owner  in  respect  of  any  claim.  [See  D.C.  Jackson, Enforcement  of  Maritime  Claims,  (1985)  Appendix  5]  [  See D.C.  Jackson,  Enforcement  of  Maritime  Claims,  (1985) Appendix 5, p. 437 et seq.] . Admiralty actions in England, on the other hand, whether in rem or in personam, are confined to well defined maritime liens or claims and directed against the res(ship,  cargo and freight)  which is the subject-matter of the dispute or any other ship in the same beneficial ownership as the res in question.”

xxxx xxxx xxxx xxxx xxxx

“99. What then was the jurisdiction that the Court of England exercised  in  1890?  The  law  of  Admiralty  was  developed  by English courts both as a matter of commercial expediency and due to equity and justice. Originally it was a part of common law jurisdiction,  but  the  difficulty  of  territorial  limitations, constraints of common law and the necessity to protect the rights and interests of its own citizens resulted in growth of maritime lien a concept distinct from common law or equitable lien as it represents a charge on maritime property of a nature unknown alike to the common law or equity. The Privy Council explained

Page 19 of 57

it as ‘a claim or privilege upon a thing to be carried into effect by legal process’ [Harmer v. Bell, (1851) 7 Moo PC 267 : 13 ER 884]  .  Law  was  shaped  by  exercise  of  discretion  to  what appeared  just  and  proper  in  the  circumstances  of  the  case. Jurisdiction was assumed for injurious act done on high seas and the scope was extended, ‘not only to British subjects but even to aliens’ [Hailey (The), LR 2 PC 193] . Maritime law has been exercised all over the world by Maritime powers. In England it was part of Municipal law but with rise of Britain as empire the law  grew  and  it  is  this  law,  that  is,  ‘Maritime  Law  that  is administered  by  the  Admiralty  Court’  [Halsbury's  Laws  of England, 4th Edn., Vol. 1] . From the Maritime law sprang the right known as Maritime lien ascribing personality to a ship for purposes of making good loss or damage done by it or its master or  owner  in  tort  or  contract.  In  England  it  grew  and  was developed  in  course  of  which  its  scope  was  widened  from damage done by a  ship to claims of  salvor,  wages,  bottomry, supply of necessaries and even to bills of lading. Its effect was to give the claimant a charge on res from the moment the lien arose which follows the res even if it changed hands. In other words a maritime lien represented a charge on the maritime property. The advantage which accrued to the maritime lienee was that he was provided with a security for his claim up to the value of the res. The essence of right was to identify the ship as wrongdoer and compel  it  by  the  arrest  to  make  good  the  loss.  Although the historical review in England dates back to the 14th Century but its statutory recognition was much later and ‘maritime law came to jurisprudential maturity in the first half of the 19th Century’ [Maritime  Liens  by  D.R.  Thomas].  And  the  first  statutory recognition  of  such  right  came  in  1840  when  the  Admiralty Court Act of 1840 was enacted empowering the admiralty court to decide all questions as to the title or ownership of any ship or vessel or the procedure thereof remaining in the territory arising in any cause of possession, salvage, damage, wages or bottomry. By clause (6) of the Act jurisdiction was extended to decide all claims  and  demands  whatsoever  in  the  nature  of  salvage  for services  rendered to  or  damage  received  by any ship  or  sea- going  vessel  or  in  the  nature  of  towage  or  for  necessaries

Page 20 of 57

supplied to any foreign ship or sea-going vessel and the payment thereof whether such ship or vessel may have been within the body of a country or upon the high seas at the time when the services  were  rendered  or  damage  received  or  necessary furnished in respect of such claims. But the most important Act was passed in 1861 which expanded power and jurisdiction of courts and held the field till it was replaced by Administration of Justice Act, 1920. The importance of the Act lay in introducing the statutory right to arrest the res on an action in rem. Section 35 of the 1861 Act provided that the jurisdiction by the High Court of Admiralty could be exercised either by proceedings in rem or  proceedings in  personam. “The essence of  the rem in procedure  is  that  ‘res’ itself  becomes,  as  one  might  say,  the defendant, and ultimately the ‘res’ the ship may be arrested by legal process and sold by the Court to meet the plaintiff's claim. The primary object, therefore, of the action in rem is to satisfy the claimant out of the res” [Maritime Lawby Christopher Hill] . If the 1840 Act was important for providing statutory basis for various types of  claims then 1861 Act was a  step forward in expanding the jurisdiction to claims of bill of lading. Section 6 of the Act was construed liberally so as to confer jurisdiction and the expression ‘carried into any port was’ was expanded to mean not only when the goods were actually carried but even if they were to be carried [(The) Ironsides, 167 ER 205(The) St. Cloud, 167 ER 29(The) Norway, 167 ER 347] . Further the section was interpreted as providing additional remedy for breach of contract [ Carter: History of English Courts] . By the Jurisdiction Act of 1873  the  court  of  Admiralty  was  merged  in  High  Court  of Justice. Result was that it obtained jurisdiction over all maritime cases. Therefore what was covered by enactments could be taken cognisance of in the manner provided in the Act but there was no bar  in  respect  of  any  cause  of  action  which  was  otherwise cognizable and arose in Admiralty. Section 6 of 1861 Act was confined to claim by the owner or consignee or assignee of any bill of lading of any goods carried into any port in England or Wales (to be read as India). But it did not debar any action or any claim by the owner or consignee or assignee of any bill of lading in respect of cargo carried out of the port. Even if there

Page 21 of 57

was no provision in 1861 Act, as such, the colonies could not be deprived under 1890 Act from exercising jurisdiction on those matters  which  were  not  provided  by  1861  Act  but  could  be exercised or were otherwise capable of being exercised by the High Court of England. ‘The theory was that all matters arising outside the jurisdiction of common law i.e. outside the body of a country  were  inside  the  jurisdiction  of  Admiralty’  [Carter: History  of  English  Courts].  ‘That  this  Court  had  originally cognizance of all transaction civil and criminal, upon the high seas, in which its own subjects were concerned, is no subject of controversy’ [ Lord Stowell in ‘The Hercules’ 2 Dod. 371] . To urge, therefore, that the Admiralty court exercising jurisdiction under  1890  Act  could  not  travel  beyond  1861  Act  would  be going against  explicit  language of  the Statute.  Even now, the Admiralty jurisdiction of the High Court of Justice in England is derived  ‘partly  from  Statute  and  partly  from  the  inherent jurisdiction of Admiralty’ [Maritime Liens by D.R. Thomas] . Observations of Lord Diplock in Jade (The) [ See D.C. Jackson, Enforcement of Maritime Claims, (1985) Appendix 5, p. 437 et seq.] that Admiralty jurisdiction was statutory only have to be understood in the context they were made. By 1976 the statutory law  on  Admiralty  had  become  quite  comprehensive.  Brother Thommen,  J.,  has  dealt  with  it  in  detail.  Therefore  those observations are not helpful in deciding the jurisdiction that was exercised by the High Court in England in 1890.”

(emphasis supplied)

22. The emphasis of the respondent is, thus, on the maritime claim

being maintained against the owner of the ship and detention of a ship

as a sequitur thereto as security for a decree liable to be passed against

the owners of the ship in personam.  Since the claim is stated to be one

against  Reflect  Geophysical  and  not  against  the  owners,  such  a

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detention  could  not  have  been  made,  it  was  contended.   Reflect

Geophysical, in fact, has not even been made a party to the suit, the

entity, which would be liable in personam.

International Convention on Arrest of ship, 1999:

23. The provisions of the aforesaid Convention have been referred

to  especially  keeping  in  mind  the  observations  of  this  Court  in

Liverpool  &  London  S.P.  &  I  Association  Limited  v.  M.V.  Sea

Success I & Anr.5,which read as under:

“57. This Court in M.V. Elisabeth [M.V. Elisabeth v. Harwan Investment  and  Trading  (P)  Ltd.,  1993  Supp  (2)  SCC 433] observed that Indian statutes lag behind any development of international  law and further  it  had not  adopted the  various conventions but opined that the provisions thereof having been made as a result of international unification and development of the maritime laws of the world should be regarded as the international common law or transnational law rooted in and evolved out of the general principles of national laws, which, in  the  absence  of  any  specific  statutory  provisions  can  be adopted and adapted by courts to supplement and complement national statutes on this subject.”

xxxx xxxx xxxx xxxx xxxx

“59.M.V. Elisabeth [M.V. Elisabeth v. Harwan Investment and Trading (P) Ltd., 1993 Supp (2) SCC 433] is an authority for the  proposition  that  the  changing  global  scenario  should  be kept in mind having regard to the fact that there does not exist any primary act  touching the subject  and in absence of  any

5 (2004) 9 SCC 512

Page 23 of 57

domestic  legislation  to  the  contrary;  if  the  1952  Arrest Convention  had  been  applied,  although  India  was  not  a signatory thereto, there is obviously no reason as to why the 1999 Arrest Convention should not be applied.

60.  Application  of  the  1999  Convention  in  the  process  of interpretive  changes,  however,  would  be  subject  to:  (1) domestic law which may be enacted by Parliament; and (2) it should be applied only for enforcement of a contract involving public law character.”

24. Therefore, in the interest of international comity, though India is

not a signatory to the Convention of 1999, the principles of the same

are utilized and applied to appropriate situations to determine whether

a  ‘maritime  claim’,  as  understood  in  the  international  context  has

arisen  and  whether  the  same  warrants  the  arrest  of  the  vessel  in

question as per its provisions.

25. Article 1 of the Convention defines ‘Maritime Claim to include:

“Article 1 Definitions

For the purposes of this Convention:

1. "Maritime Claim" means a claim arising out of one or more of the following:

xxxx xxxx xxxx xxxx xxxx

“(f) any agreement relating to the use or hire of the ship, whether contained in a charter party or otherwise;”

Page 24 of 57

xxxx xxxx xxxx xxxx xxxx

“(l) goods, materials, provisions, bunkers, equipment (including containers)  supplied  or  services  rendered  to  the  ship  for  its operation, management, preservation or maintenance;”

26. Article  2  stipulates  the  powers  of  arrest  and  sub-clause  (2)

clarifies that the ship may be arrested only respect a maritime claim.

Sub-clause  (3)  stipulates  that  ship  may be  arrested  for  purposes  of

obtaining  security  notwithstanding  that  by  virtue  of  a  jurisdiction

clause or arbitration clause, it has to be adjudicated in a State other

than  the  State  where  it  has  been  arrested.   For  an  elucidation  we

reproduce the said clauses:

“Article 2 Powers of arrest

xxxx xxxx xxxx xxxx xxxx

2. A ship may only be arrested in respect of a maritime claim but in respect of no other claim.

3. A ship may be arrested for the purpose of obtaining security notwithstanding  that,  by  virtue  of  a  jurisdiction  clause  or arbitration clause  in  any relevant  contract,  or  otherwise,  the maritime claim in respect of which the arrest is effected is to be adjudicated in a State other than the State where the arrest is effected, or is to be arbitrated, or is to be adjudicated subject to the law of another State.”

Page 25 of 57

27. Article 3 deals with the exercise of right of arrest, which reads as

under:

“Article 3 Exercise of right of arrest

1.  Arrest  is  permissible  of  any  ship  in  respect  of  which  a maritime claim is asserted if:

(a)  the  person  who  owned  the  ship  at  the  time  when  the maritime claim arose is liable for the claim and is owner of the ship when the arrest is effected; or

(b)  the  demise  charterer  of  the  ship  at  the  time  when  the maritime  claim  arose  is  liable  for  the  claim  and  is  demise charterer or owner of the ship when the arrest is effected; or

(c) the claim is based upon a mortgage or a "hypothèque" or a charge of the same nature on the ship; or

(d) the claim relates to the ownership or possession of the ship; or

(e) the claim is against the owner, demise charterer, manager or operator of the ship and is secured by a maritime lien which is granted or arises under the law of the State where the arrest is applied for.

2. Arrest is also permissible of any other ship or ships which, when the arrest is effected, is or are owned by the person who is liable for the maritime claim and who was, when the claim arose:

(a) owner of the ship in respect of which the maritime claim arose; or

(b) demise charterer, time charterer or voyage charterer of that

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ship.

This provision does not apply to claims in respect of ownership or possession of a ship.

3. Notwithstanding the provisions of paragraphs 1 and 2 of this article, the arrest of a ship which is not owned by the person liable for the claim shall be permissible only if, under the law of  the  State  where  the  arrest  is  applied  for,  a  judgment  in respect  of  that  claim  can  be  enforced  against  that  ship  by judicial or forced sale of that ship.”

28. We may note that the claim of the appellant, Sunil B. Naik, is

based on the definition clause of the maritime claim clause (f) & (l) as

discussed even in the impugned order while the claim of Yusuf Abdul

Gani is restricted to clause (f).

29. The endeavour of the appellants to bring the claim within the

aforesaid  provisions  is  naturally  opposed  by  the  respondent  on  the

ground  that  the  agreement  between  the  appellants  and  Reflect

Geophysical  is  actually  a  charter  hire  agreement  between  Reflect

Geophysical and the two appellants.  It was contended that there were

neither  any  goods  supplied  nor  services  rendered  and,  in  fact,  the

survey operations never commenced as the ships remained stationed at

the port at Okha whereas the respondent vessel never arrived at Okha.

Reflect Geophysical is stated to have actually engaged the vessels of

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the appellant through a charter hire agreement and this cannot form a

part of the maritime claim against the respondent ship.  In this behalf,

reference has been made to the judgment in The “Eschersheim”6.  The

relevant portion, which is also reproduced in the impugned judgment is

extracted as under:

“In my opinion there is no good reason for excluding from the expression  "an  agreement  for  the  use  or  hire  of  a  ship"  any agreement  which  an  ordinary  ASN  12/14  Appeal-209-13.doc business  man  would  regard  as  being  within  it.  If  which  an ordinary business man would regard as being within it. If A and B make an agreement for A's ship to be used for carrying out any operation for B, I consider that the agreement is one for the use, if not for the hire of the ship. Thus an agreement for a ship to be employed for dredging, towing, cable laying and salvage would be an agreement for the use of the ship. But is an agreement for dredging or towage or cable laying or salvage an agreement for the use of a ship if there is no express reference in the agreement to any such use. If the operation can only be carried by means of a ship. I consider that the agreement must be one for the use or hire of a ship. A towage agreement would therefore always come within the words. Dredging or cable laying could conceivably be performed by other means but in the great majority of cases it would be so obvious that the use of a ship must be intended that this would be implied.....”

30. Thus, the plea is that the charter hire agreement is for use of the

appellant’s vessel by Reflect Geophysical.  The respondent is not liable

personally for the maritime claim and, thus, there can be no arrest of

the  ship  since  the  ship  is  not  owned by Reflect  Geophysical.   The 6 [1976] Vol. I Lloyd’s Law Reports 81

Page 28 of 57

charter agreement provisions were referred to (extracted aforesaid) to

substantiate that at present, at best Reflect Geophysical was only a de

facto owner  and not  a  de jure owner  and that  in  order  for  Reflect

Geophysical  to  be  de  jure owner  the  provisions  provided  how  six

months in advance of the expiry of the contract recourse could be had

to the same.  That occasion never arose.

31. A reference  was,  thus,  made  to  Article  3(3)  of  the  aforesaid

Convention, which provides for arrest of the ship only if the judgment

in respect of that claim can be enforced against the ship by judicial or

forced sale of that ship and in the absence of any provision under the

Indian law by which the ship not owned by a person could be made

liable for a maritime claim, the arrest of the ship could not take place.

The judgment could be obtained only under the contract which would

be against Reflect Geophysical.

32. Mr.  Naphade,  learned Senior  Advocate  for  the  appellants  has

referred to the judgment in Medway Drydock & Engineering Co. Ltd.

v. M.V. Andrea Ursula7 dealing with the action in rem on the question

whether the ship under a  demised charter  is  “beneficially owned as 7[1973] QB 265

Page 29 of 57

respects all the shares therein” by the charterer, within the meaning of

the expression in  Section 3(4)  of  the Administration of  Justice  Act,

1956.  It was observed that “a ship would be beneficially owned by the

person who, whether or not he was the legal or equitable owner or not,

lawfully had full possession and control of her, and, by virtue of such

possession and control, had all the benefit and use of her which a legal

or equitable owner would ordinarily have.”

33. In the aforesaid context it may be noticed that in Section 1 of the

Administration of Justice Act, 1956, the Admiralty jurisdiction could

be invoked inter alia in the following case:

“1. Admiralty jurisdiction of the High Court

(I)  The  Admiralty  jurisdiction  of  the  High  Court  shall  be  as follows, that is to say, jurisdiction to hear and determine any of the following questions or claims -  

xxxx xxxx xxxx xxxx xxxx

(h)  any  claim  arising  out  of  any  agreement  relating  to  the carriage of goods in a ship or to the use or hire of a ship;”

34. A reference, has, thus, also been made to the decision in  The

“Permina  3001”8 of  the  Singapore  Court  of  Appeal,  the  relevant

8 (1979) Vol. 1 Lloyd’s Law Reports 327

Page 30 of 57

portion of which reads as under:

“The question is  what  do the words “beneficially  owned as respects all the shares therein” mean in the context of the Act. These words are not defined in the Act.  Apart from authority, we would construe them to refer only to such ownership of a ship as is vested in a person who has the right to sell, dispose of  or  alienate  all  the  shares  in  that  ship.   Our  construction would clearly cover the case of a ship owned by a person, who whether  he  is  the  legal  owner  or  not,  is  in  any  case  the equitable owner of all the shares therein.  It would not, in our opinion, cover the case of a ship which is in the full possession and control of a person who is not also the equitable owner of all the shares therein.  In our opinion, it would be a misuse of language to equate full possession and control of a ship with beneficial ownership as respects all the shares in a ship.  The word “ownership” connotes title, legal or equitable whereas the expression  “possession  and  control”,  however  full  and complete, is not related to title.  Although a person with only full  possession  and  control  of  a  ship,  such  as  a  demise charterer, has the beneficial use of her, in our opinion he does not have the beneficial ownership as respects all the shares in the ship and the ship is not “beneficially owned as respects all the shares therein” by him within the meaning of s.4(4).”

35. In an ex parte case in The “Leoborg”9 the Admiralty Judge dealt

with a claim of escorting services provided by a tug from outside a port

into a port for services in the nature of towage.

36. The Appellants have also placed reliance on the case of  Epoch

Enterrepots v. M.V. Won Fu10to differentiate between different types

9 (1962) Vol.. 2. Lloyd’s List Law Reports 146 10(2003) 1 SCC 305

Page 31 of 57

of charter parties and to assert that in the case of a demise charter, the

charterer has complete control of the vessel.  

The Legal view which prevailed with the Courts below:

37. The  bedrock  of  the  submissions  of  Mr.  Prashant  S.  Pratap,

learned Senior Advocate, who appeared even in the proceedings before

the Courts below would show that the plea of no right of arrest of the

respondent  vessel  was  based  on  Reflect  Geophysical  not  being  the

owner but only a charterer of the vessel.  The essential ingredients for

maintaining a maritime claim for which a vessel may be detained were

specified as under:

“In order to ascertain whether in an action in rem filed in the Admiralty

jurisdiction of the court, the Plaintiff is entitled to an order of arrest of

the Defendant vessel, the following needs to be established:   

(a) The plaintiff has a maritime claim;

(b) The vessel in respect of which the plaintiff has a maritime claim;

(c)  The party liable  in  personam in  respect  of  the maritime claim; and

(d) The party liable  in personam is  the owner of  the vessel sought to be arrested.”

Page 32 of 57

38. The learned single Judge opined that the claim in Yusuf Abdul

Gani’s case was in respect of use or hire of another ship Orion Laxmi

and the claim, thus,  could not be maintained against the respondent

vessel.   It  was  stated  to  be  a  claim  in  personam against  Reflect

Geophysical  and thus,  only a  vessel  owned by Reflect  Geophysical

could have been restrained.  The learned single Judge also records that

it has not been the case of Yusuf Abdul Gani that Reflect Geophysical

is a de facto owner of the ship sought to be arrested and the position of

an owner of a ship is different from a demised charter when it comes to

the arrest of a vessel owned or chartered.  In this behalf a reference has

been made to the case of Polestar Maritime Ltd. v. M.V. Qi Lin Men

& Ors.11 where Article 3(2) of the Arrest Convention was elucidated

specifying that a ship can be arrested in respect of a maritime claim

against another ship only in the following circumstances:

(a) The owner of both the ships is one and the same.

(b) In case a maritime claim exists qua the owner of a ship,

which is taken on a demised charter then the liability can be

recovered by restraint of the ship owned by the charterer.

11Admiralty Suit (Lodging) No.3547/2008 decided on 22.10.2008  

Page 33 of 57

This  view  originally  elucidated  by  the  learned  single

Judge  of  the  Bombay  High  Court  found  favour  with  the

Division  Bench  when  the  appeal  was  dismissed  vide  order

dated 6.1.2009 in Appeal (Lodging) No.772/2008.  The Special

Leave Petition filed against the same was also dismissed vide

order dated 23.1.2009.

39. The  conclusion,  thus,  was  that  there  was  no  principle  or

authority for proposition that a maritime claim for unpaid charter hire

in respect of vessel ‘A’ against the hirer thereof can be enforced by

arresting vessel ‘B’, which is on bareboat charter of the hirer of the

former vessel vis-à-vis vessel ‘A’.

40. The order passed by the learned single Judge in Sunil B. Naik’s

case merely referred to the said view adopted in Yusuf Abdul Gani’s

case to vacate the injunction.  The Division Bench affirmed the orders

of  the  learned  single  Judge  by  passing  two  separate  orders  in  the

appeals filed.  The orders are of the same date, i.e. 10.5.2013, which

have been assailed in the two appeals.

41. The Division Bench took note of the fact that though India is not

Page 34 of 57

a signatory to the Arrest Convention, the same principles would apply

while  determining whether  a  maritime claim has  arisen  causing for

such  detention  of  the  vessel.   The  Division  Bench  referred  to  the

judgment  in  Epoch  Enterrepots12 to  conclude  that  the  distinction

sought to be drawn between a bareboat charter and a demised charter

was an issue no more  res integra.  A reference was also made to the

Commentary  on  “Maritime  Law”  5th Edition  by  Christopher  Hill,

which explained that in a demised charter or bareboat charter the ship

owner fades into the background and merely collects its hire payment

for the period of the charter.  It was stated to be akin to a lease of a

ship,  similar  to  a  hire  purchase  arrangement  rather  than  a  simple

agreement for hire or use of  the ship.   Thus,  the so-called  de facto

ownership of Reflect Geophysical qua the respondent vessel was held

to  be  immaterial  in  respect  of  a  maritime  claim  arising  from  an

agreement for use or hire of another vessel, which is the situation in

both the cases.

42. Insofar  as  the  respondent  vessel  is  concerned,  there  is  no

agreement  entered into by either  of  the two appellants  and,  thus,  it

12 supra

Page 35 of 57

cannot be a maritime claim in respect of Article 1(1)(f) of the Arrest

Convention.  Consequently, there would be no occasion to arrest the

vessel under Article 3(1)(b) of the Arrest Convention as no maritime

claim has resulted in the hands of the demised charterer with regard to

the demised vessel.   The maritime claim by either of the appellants

could,  thus,  be enforced only by arresting another vessel  owned by

Reflect  Geophysical  and  the  de  facto  ownership,  could  not  be

converted into a de jure ownership.  In respect of Article 1(1)(l), it was,

once again, held that there was no supply of goods to the vessel or of

supply of services to the vessel in question, which was the respondent

vessel.   Insofar  as  the reasoning in  Sunil  B.  Naik’s  case,  so  far  as

Article 1(1)(l) is concerned, it has been categorically found that it was

not  a  case  where  goods  had  been  given  on  hire  or  for  use  of  the

respondent vessel.

Conclusion:

43. On giving our thoughtful consideration to the issue at hand, we

are in full agreement with the view taken by the Courts below and find

no reason to interfere in appeal.

Page 36 of 57

44. We have referred to the various terms of the bareboat charter

which make it quite clear that Reflect Geophysical had the status of a

de  facto owner.   The  charter  agreement  did  contain  a  clause  for

conversion of the status into a de jure owner but the occasion for the

same never arose.  The option to purchase was to be exercised by an

advance intimation of six months prior to the end of the charter period

and the purchase price was also specified as US$ 3,01,50,000.  The

charterer could not make any structural changes in the vessel or in the

machinery, boilers, appurtenances or space parts thereof without first

securing the owner’s approval and the vessel had to be restored to its

former condition before the termination of the charter, if so required by

the  owners.   This  was,  thus,  a  deed  between  the  owner  of  the

respondent and Reflect Geophysical.

45. The  contracts  entered  into  with  the  appellants  by  Reflect

Geophysical  are  completely  another  set  of  charter  hire

agreements/contracts.   The  unpaid  amounts  under  these  contracts

amount  to  claims  against  Reflect  Geophysical.   Thus,  if  there  was

another  vessel  owned by Reflect  Geophysical,  the appellants  would

have been well within their rights to seek detention of that vessel as

Page 37 of 57

they have a maritime claim but not in respect of the respondent vessel.

The maritime claim is in respect of the vessels which are owned by the

appellants  and the  party liable  in  personam is  Reflect  Geophysical.

Were the respondent vessel put under the de jure ownership of Reflect

Geophysical, the appellants would have been within their rights to seek

a detention order against that vessel for recovery of their claims.

46. In the facts  of  the present  case the owners of  the respondent

vessel,  in  fact,  also  have  a  claim  against  Reflect  Geophysical  for

unpaid charter amount.  Thus, unfortunately it is both the owner of the

respondent vessel on the one hand and the appellants on the other, who

have a maritime claim against Reflect Geophysical,  which has gone

into liquidation.  The appellants quite conscious of the limitations of

any endeavour to recover the amount from Reflect Geophysical, have

ventured into this litigation to somehow recover the amount from, in

effect,  the  owners  of  the  respondent  vessel  by  detention  of  the

respondent vessel.  That may also be the reason why the appellants did

not  even think it  worth their  while  to  implead Reflect  Geophysical

against whom they have their claim in  personam, possibly envisaged

as a futile exercise.

Page 38 of 57

47. It is in the aforesaid context that while discussing this issue in

the impugned order, the essential ingredients for detention of a vessel

in a maritime claim were specified (para 37 aforesaid).

48. The  aforesaid  issue  has  also  been  discussed  in  Polestar

Maritime  Ltd.13 while  dealing  with  Article  3(2)  of  the  Arrest

Convention.  The test of the ownership of both the ships as one and the

same  is  not  satisfied  in  the  present  case.   The  second  situation

envisaged is where another ship owned by the charterer is detained,

i.e.,  he  has  taken  ‘A’ ship  on  charter  where  he  has  only  de  facto

ownership  and his  ship  ‘B’ is  detained where  charterer  has  de jure

ownership.   It  cannot  be  countenanced  that  where  no  in  personam

claim  lies  against  an  entity,  still  the  ship  of  that  entity  taken  on

bareboat charter can be detained to recover the dues.  The owner of the

respondent vessel is as much a creditor of Reflect Geophysical as the

appellants.

49. Mr.  Naphade,  learned  Senior  Advocate  while  relying  on  the

13 supra

Page 39 of 57

judgment  in  M.V.  Elisabeth  &Ors.14 had  referred  to  the  expanding

jurisdiction of a maritime claim.  However, the observations made in

the said judgment reproduced hereinabove in para 21 would show that

the arrest of the ship is regarded as a mere procedure to obtain security

to satisfy the judgment.  To that extent it is distinguished from a right

in personam to proceed against the owner but there has to be a liability

of  the  ship  owner  and  in  that  eventuality  the  legal  proceedings

commenced  in rem  would  become  a  personal  action  in  personam

against the defendant when he enters appearance.  There cannot be a

detention of a ship as a security and guarantee arising from its owner

for a claim which is in respect of a non-owner or a charterer of the

ship.

50. On turning to the provisions of the Convention, a maritime claim

is specified as relating to use or hire of a ship whether contained in a

charter  party  or  otherwise  [clause  (f)].   Insofar  as  clause  (l)  is

concerned they relate  inter alia to services rendered to the ship.  The

question, however, is – which is the ship in question?  Such an order of

detention can be in  respect  of  a  ship where there is  identity  of  the

14 supra

Page 40 of 57

owner against whom the claim in personam lies and the owner of the

ship.  It cannot be used to arrest a ship of a third party or a non-owner.

51. As an  illustrative  example  if  we  consider  the  principles  of  a

garnishee order where amounts held by a third party on behalf of a

defendant can be injuncted or attached to satisfy the ultimate claim,

which may arise against the defendant.  It is not as if somebody else’s

money is attached in pursuance to a garnishee’s order.  Similarly for a

claim against the owner of the vessel, a vessel may be detained and not

that somebody else’s vessel would be detained for the said purpose.

The crucial  test  would  be  of  ownership,  which  in  the  present  case

clearly  does  not  vest  with  Reflect  Geophysical  and  the  de  facto

ownership under their bareboat charter cannot be equated to a de jure

owner, which is necessary for an action in personam.

52. We  may  note  that  for  the  purposes  of  determining  the

controversy, it is not really of much relevance that effectively no work

was  carried  out  under  the  agreements  between  the  appellants  and

Reflect Geophysical as the chartered ship never commenced its task

and never reached the port from where the task was to be commenced.

Page 41 of 57

53. One of the contentions advanced by the learned Senior Advocate

for  the  appellant  recorded  by  us  relates  to  the  plea  of  “beneficial

ownership” of the respondent ship by Reflect Geophysical and, thus,

the enforceability of a claim by the appellants against the respondent

ship.   In support  of  this  plea reliance is placed on the judgment in

Medway Drydock & Engineering Co. Ltd.15.  We must record at the

inception itself that this issue appears not to have been raised either

before the learned single Judge or the Division Bench as there is no

discussion on this aspect.   We, however, still  feel necessary to deal

with this aspect and in some detail largely based on our own foray into

this area of law rather than simply relying on the judgment referred to

aforesaid.

54. United  Kingdom  became  a  signatory  to  two  international

conventions  –  ‘International  Convention  relating  to  Arrest  of  Sea

Going  Ships’  and  ‘International  Convention  on  certain  Rules

concerning Civil Jurisdiction in matters of Collision’ signed at Brussels

on 10.5.1952.   Article  3  of  the former  in  sub-clause  (2)  states  that

“Ships  shall  be  deemed to  be  in  the  same ownership  when  all  the 15 supra

Page 42 of 57

shares therein are owned by the same person or persons.”  The context

is, thus, the ownership of the ship when a reference is made to “shares

therein”  and  whether  they  are  owned  by  the  same  person  or  not.

“Shares”  in  a  ship  owes  its  origination  to  sailing  vessels  being

expensive  items  and subject  to  unexpected  loss  and  thus,  were  not

owned by one person.  Thus, more than one person could own a share

in a ship on the basis of capital tied up in the vessel.  Such shares were

fairly random but by mid 19th century it was usual for shares to be in

multiples of 64 parts and, thus, ownership by 64th is still the norm in

England.  The various requirements of a ship, for example, rope-maker,

sail maker, etc. were parts of a share owner and such shares could be

sold or bought like any other commodity.  Normally there would be a

main owner who would have a large investment and be responsible for

the sail and working of the ship called “ship’s husband” while other

owners were simply cash investors.  The profits and liabilities were

accordingly shared in the same ratio.  This concept finds mention in

The Merchant Shipping Act, 1958 under Section 25, which deals with

‘Register Book’ as under:

“25. Register book.―Every registrar shall keep a book to be called the register book and entries in that book shall be made

Page 43 of 57

in accordance with, the following provisions:―

xxxx xxxx xxxx xxxx xxxx

(b) subject to the provisions of this Act with respect to joint owners  or  owners  by  transmission,  not  more  than  ten individuals shall be entitled to be registered at the same time as owners  of  any  one  ship;  but  this  rule  shall  not  affect  the beneficial interest of any number of persons represented by or claiming  under  or  through  any  registered  owner  or  joint owner;”

55. In  view  of  United  Kingdom  signing  the  two  Conventions

referred to aforesaid and giving legislative backing, Section 3 of The

Administration of Justice Act, 1956, incorporated the same.  In sub-

section (4) of Section 3, while dealing with the invocation of an action

in  rem,  the  concept  of  “beneficially  owned”  vis-à-vis a  ship  was

introduced and the right to invoke it against the same.

56. The observations in Medway Drydock & Engineering Co. Ltd.16

referred to while recording the submissions of Mr. Naphade, have to be

appreciated  in  that  context.   However,  a  deeper  study  of  the  issue

shows that this judgment has been dissented from even by the Queen’s

Bench  itself  in  I Congreso Del Partido17 by  Robert  Goff,  J.   This

judgment debates the concept of  “beneficially owned” in respect  of

16 supra 17[1978] Q.B. 500

Page 44 of 57

shares  therein  within  the  meaning  of  Section  3(4)  of  The

Administration  of  Justice  Act,  1956.   There  is  a  respectful

disagreement  with  the  line  adopted  by Brandon,  J.  in  the  Medway

Drydock & Engineering Co. Ltd.18.  Thus, it is noticed that Brandon, J.

construed  the  words  “beneficially  owned  as  respects  all  the  shares

therein” as not being restricted to legal or equitable ownership, but as

being wide enough to include such “ownership” as is conferred by a

demise charter.  Robert Goff, J. recorded the reasoning of Brandon, J.

for doing so as under:

“The  reasoning  of  Brandon  J.  which  led  him  to  reach  this conclusion  was  as  follows:  (1)  The  expression  “beneficially owned” in section 3 (4) is capable of more than one meaning: either owned by someone who, whether he is the legal owner or not, is in any case the equitable owner; or beneficially owned by a person who, whether he was the legal or equitable owner or not,  lawfully  had  full  possession  and  control  of  her,  and,  by virtue of such possession and control, had all the benefit and use of her which a legal or equitable owner would ordinarily have. An example  of  the latter  would be  such “ownership”  as  was conferred by a demise charter. A demise charterer has, because of the extent of his possession and control, often been described as the owner pro hac vice or the temporary owner. (2) Since the meaning of the words “beneficially owned” is not clear the court can and should look at the terms of the Brussels Convention of 1952, section 3 of the Act of 1956 being intended to give effect to  article  3  of  the Convention;  and having done so the court should so construe the statute as to give effect, so far as possible, to the presumption that Parliament intended to fulfil, rather than

18 supra

Page 45 of 57

to break, its international obligations. If section 3 (4) of the Act is  to  give full  effect  to  article  3,  the expression “beneficially owned”  in  the  section  must  be  given  the  second  of  the  two meanings  of  which it  is  capable,  which embraces  not  only  a demise  charterer,  but  also  any  other  person  with  similar complete possession and control. (3) Although Hewson J.  had reached a different conclusion in The St. Merriel [1963] P. 247, Brandon  J.  felt  justified  in  declining  to  follow  that  decision having regard in particular to two points. First, Hewson J. had not been invited to look at the Brussels Convention, because at that time it was commonly thought that it was not permissible to do  so  unless  the  Act  contained  an  express  reference  to  the Convention. Second, the view accepted by Hewson J. in The St. Merriel  was  no  different  in  principle  from  one  which  was discussed and rejected by Lord Atkinson in Sir  John Jackson Ltd.  v.  Steamship  Blanche  (Owners)  (The  Hopper  No.  66) [1908] A.C. 126, 135–136.”

57.  Robert  Goff,  J.  then  records  the  significant  factor,  i.e.,  that

Medway Drydock & Engineering Co. Ltd.19 was decided on a motion

by plaintiffs for judgment in an ex parte proceedings while he had the

benefit of submissions of both the sides and Robert Goff, J. sought to

be persuaded by the counsel appearing for the ship Mr. Davenport in

the following manner:

“Mr. Davenport, for Mambisa, to whose argument I am much indebted,  has  however  urged  me  not  to  follow The  Andrea Ursula  [1973]  Q.B.  265.  The  decision  in  that  case  is  not binding  upon  me  and,  while  of  course  I  have  the  greatest respect for any decision of Brandon J., I have reconsidered the matter and, having done so, I have reached the conclusion that the  words  “beneficially  owned  as  respects  all  the  shares

19 supra

Page 46 of 57

therein” refer only to cases of equitable ownership, whether or not accompanied by legal ownership, and are not wide enough to include cases of possession and control without ownership, however full  and complete such possession and control may be. Since I have reached a different conclusion to Brandon J., I think it right to point out that I have had the benefit of a full argument by counsel for the defendants in this case, whereas The Andrea Ursula came before Brandon J.  on a motion by plaintiffs for judgment in default of appearance, on which the defendants were not represented.”

(emphasis supplied)

58. Thereafter  Robert  Goff,  J.  records  his  conclusion  in  the

following manner:

“My approach to the case before me is as follows. I start with the  statute,  and  the  words  with  which  I  am  particularly concerned, and which I have to construe in the context of the statute,  are  “beneficially  owned  as  respects  all  the  shares therein.” In my judgment, the natural and ordinary meaning of these  words  is  that  they refer  only to  such ownership  as  is vested in a person who, whether or not he is the legal owner of the vessel, is in any case the equitable owner, in other words, the first of the two meanings of which Brandon J. thought the words to be capable. Furthermore, on the natural and ordinary meaning of the words, I do not consider them apt to apply to the case of a demise charterer or indeed any other person who has  only possession of  the  ship,  however  full  and complete such possession may be, and however much control over the ship he may have.

Generally  speaking,  the  essential  characteristic  of  a  demise charter is that it constitutes a contract of hire of the ship, under which the possession of the ship passes to the charterer,  the master of the ship being the servant of the charterer, not of the owner.  It  is  to be compared with the ordinary form of time

Page 47 of 57

charter,  which  is  not  a  contract  of  hire  but  a  contract  of services, under which the possession remains in the owner and the  master  is  the  servant  of  the  owner:  see  Sea  &  Land Securities Ltd. v. William Dickinson & Co. Ltd . [1942] 2 K.B. 65, 69–70 per Mackinnon L.J. and Scrutton on Charterparties, 18th  ed.  (1974),  articles  24–26.  It  is  true  that  a  demise charterer has in the past been described variously as “owner pro hac vice:” see, for example, Frazer v. Marsh (1811) 13 East 238, 239, per Lord Ellenbrough C.J., The Lemington (1874) 2 Asp.M.L.C.  475,  478,  per  Sir  Robert  Phillimore,  and  The Tasmania (1888) 13 P.D. 110, 118, per Sir James Hannen P.; or as a person who is “for the time the owner of the vessel:” see Sandeman v. Scurr (1866) L.R. 2 Q.B. 86, 96, per Cockburn C.J.; or as a person with “special and temporary ownership:” see  The  Hopper  No.  66  [1908]  A.C.  126,  136,  per  Lord Atkinson.  I  doubt however if  such language is  much in use today; and its use should not be allowed to disguise the true legal nature of a demise charter. Furthermore, no case has been drawn to my attention, and I am aware of more, in which a demise charterer has been described as a “beneficial owner,” still less as a “beneficial owner as respects all the shares in the vessel.” Indeed, any reference in this context to ownership “as respects all the shares in the vessel” is, in my judgment, inapt to describe the possession of a demise charterer; such words are  only  appropriate  when  describing  ownership  in  the ordinary  sense  of  the  word,  and  not  possession  which  is concerned with a physical relationship with the vessel founded upon control and has nothing to do with shares in the vessel. A demise  charterer  has,  within  limits  defined  by  contract,  the beneficial  use  of  the  ship;  he  does  not,  however,  have  the beneficial ownership as respects all the shares in the ship.

Furthermore, I can find nothing in the remainder of the statute to cause me to reject the natural and ordinary meaning of the words; certainly, I would not construe other references in the statute to “ownership” — as in section 1 (1) ( a ) — or “co- owner” — as in section 1 (1) ( b ) — as referring in any way to demise  charterers.  Indeed  in  Part  V  of  the  Act,  which  is

Page 48 of 57

concerned with Admiralty jurisdiction and arrestment of ships in  Scotland,  the  equivalent  provision,  section  47  (1)  (  b  ), requires  that  “all  the  shares  in  the  ship  are  owned  by  the defendant.”  This  provision,  to  which  I  can  properly  have regard:  see  The Eschersheim [1976]  1  W.L.R.  430,  436 per Lord Diplock, reinforces my conclusion that section 3 (4) of the  Act  is  concerned with  title,  the  word “beneficial”  being introduced to allow for the peculiar English institution of the trust.”

xxxx xxxx xxxx xxxx xxxx

“Accordingly, I do not regard the words “beneficially owned as respects all the shares therein” as being capable of more than one meaning; in the absence of ambiguity this is not, on the principles established by the Court of Appeal in Salomon v. Customs and Excise Commissioners [1967] 2 Q.B. 116, Post Office v. Estuary Radio Ltd . [1968] 2 Q.B. 740 and by the House of Lords in the Convention The Eschersheim [1976] 1 W.L.R. 430, an appropriate case in which to have recourse to the  Convention.  Even  so,  out  of  respect  for  the  views  of Brandon J., I propose to examine the Convention. The relevant provisions  of  article  3  of  (the  International  Convention Relating to the Arrest of Sea-going Ships 1952) are as follows:

“(1)  Subject  to  the  provisions  of  paragraph  (4)  of  this article and of article 10, a claimant may arrest either the particular  ship  in  respect  of  which  the  maritime  claim arose,  or  any other ship which is  owned by the person who was, at the time when the maritime claim arose, the owner of the particular ship, even though the ship arrested be ready to sail; but no ship, other than the particular ship in respect of which the claim arose, may be arrested in respect  of  any  of  the  maritime  claims  enumerated  in article 1, (1), ( o ), ( p ) or ( q ), (2) Ships shall be deemed to be in the same ownership when all the shares therein are owned by the same person or persons …. (4) When in the case of a charter by demise of a ship the charterer and not the registered owner is liable in respect of a maritime

Page 49 of 57

claim relating to that ship, the claimant may arrest such ship or any other ship in the ownership of the charterer by demise, subject to the provisions of this Convention, but no other  ship in  the ownership of  the registered owner shall be liable to arrest in respect of such maritime claims. The provisions of this paragraph shall apply to any case in which a person other than the registered owner of a ship is liable in respect of a maritime claim relating to that ship.”

As I read the Convention, article 3 (1), which is expressed to be subject to article 3 (4), provides for the arrest of either the particular ship in respect of which the maritime claim arose, or (except  in  certain  specified  cases)  any  other  ship  which  is owned by the person who was, at the time when the maritime claim arose, owner of the particular ship. Furthermore, despite the argument of Mr. Alexander for the plaintiffs to the contrary, in this context I read the word “owner” as bearing its ordinary meaning, that is, the person with title to the ship; am confirmed in this view by the provision relating to ownership in article 3 (2) and by the fact that article 3 (4), to which article 3 (1) is expressed to be subject, makes special provision for the case of the demise charterer and others. It is to be observed that, if one puts article 3 (4) on one side, the draftsman of the Act of 1956 appears to have been seeking to give effect to article 3 (1) and (2) of the Convention, subject to the fact  that he appears to have been concerned to extend the word “ownership” by the addition  of  the  adjective  “beneficial,”  very  possibly  to  take account  of  the special  English institution  of  the trust  which may form no part of the domestic laws of other signatories to the Convention.”                   

(emphasis supplied)

59. We  have  been  persuaded  to  extract  in  extensio from  the

judgment in I Congreso Del Partido20 on account of the clarity of the

20supra

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view expressed by Robert Goff, J. finding it difficult to be put in better

words.   Thus,  mere  possession  of  the  ship,  however,  complete  and

whatever be the extent of the control was not found good enough to

confer the status of ownership.   The “beneficial use” of a chartered

ship  would  not  ipso  facto convert  the  status  of  a  charterer  into  a

“beneficial owner.”  The attention to the word “beneficial” in the Act

of 1956 was, thus, attributed to the requirement to take into account the

special English Institution of Trust which forms no part of domestic

law of other signatories to the Convention.

60. In  The  “Father  Thames”21 Sheen  J.  also  declined  to  follow

Medway  Drydock  &  Engineering  Co.  Ltd.22 and  followed

I Congreso Del Partido23 and  held  that  the  phrase  “beneficially

owned” in the 1956 Act did not apply to a demise charter.

61. Similarly Wee Chong Jin, C.J. of the Singapore Court of Appeal

in the decision of The “Permina 3001”24 has adopted the similar view

that a ship in full possession and control of a person, who is also not an

21 [1979] 2 Lloyd’s Rep. 364 22 supra 23supra 24 supra  

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owner of all the shares therein cannot be utilized for the purposes of

restraint of the ship.

62. Even in Canada, the Federal Court of Appeal has taken the same

view on the import of the words “beneficial owner” in the context of

the Canadian ‘Federal Court Act 1985’ which confers courts with the

jurisdiction to arrest a ship. In Mount Royal/Walsh Inc. v. The Ship

Jensen Star el al,25 Marceau, J, writing on behalf of the Bench, stated

as follows :  

“The problem, however, is that I simply do not see how a court  could  suppose  that  Parliament  may  have  meant  to include  a  demise  charterer  in  the  expression  'beneficial owner' as it appears in s-s. 43(3). Whatever be the meaning of the qualifying term 'beneficial', the word owner can only normally be used in reference to title in the res itself, a title characterized essentially by the right to dispose of the  res. The French corresponding word 'proprietaire' is equally clear in that regard. These words are clearly inapt to describe the possession  of  a  demise  charterer….  In  my  view,  the expression  'beneficial  owner'  was  chosen  to  serve  as  an instruction, in a system of registration of ownership rights, to look beyond the register in searching for the relevant person. But such search cannot go so far as to encompass a demise charterer who has no equitable or proprietary interest which could  burden  the  title  of  the  registered  owner  of  the registered  owner.  As  I  see  it,  the  expression  'beneficial owner'  serves  to  include  someone  who  stands  behind  the registered  owner  in  situations  where  the  latter  functions merely  as  an  intermediary,  like  a  trustee,  a  legal

25[1990] 1 F.C 199.

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representative  or  an  agent.  The  French  corresponding expression  'veritable  proprietaire'  leaves  no  doubt  to  that effect."

63. The  Supreme  Court  of  Canada  in  Antares  Shipping

Corporation  v.  The  Ship  ‘Capricorn’ et  al.26 also  referred  to  the

concept  of  beneficial  ownership  and  cited  with  the  approval,

observations  made  in  Halsbury’s  Laws  of  England  at  para  15  as

follows:

“Ownership in a British ship or share therein may be acquired in any of three ways – by transfer from a person entitled to transfer,  by  transmission  or  by  building.   Acquisition  by transfer  and transmission have  been the  subject  of  statutory enactment.   Acquisition  by  building  is  governed  by  the common law.  Ownership in a British ship or share therein is a question of fact and does not depend upon registration of title. Whether  registered  or  unregistered,  a  person  in  whom ownership  in  fact  vests  is  regarded  in  law  as  the  owner  if registered, as the legal owner; if unregistered, as the beneficial owner.”

(emphasis supplied)

64. The successor to the 1956 Act is the Supreme Court Act of 1981.

Section 21(4) of that Act of U.K. recognizes the discussion in view of

Robert Goff, J. by the following provision:

“21.  (4)  In  the  case  of  any  such  claim  as  is  mentioned  in section 20(2)(e) to (r), where

26 [1980] 1 S.C.R. 553

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(a) the claim arises in connection with a ship ; and

(b) the person who would be liable on the claim in an action in personam ("  the  relevant  person  ")  was,  when the  cause  of action arose, the owner or charterer of, or in possession or in control of, the ship,

an action in rem may (whether or not the claim gives rise to a maritime  lien  on  that  ship)  be  brought  in  the  High  Court against -

i)  that  ship,  if  at  the  time  when  the  action  is  brought  the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of it under a charter by demise ; or

(ii)  any other ship of  which,  at  the time when the action is brought, the relevant person is the beneficial owner as respects all the shares in it.”

65. There is a clear distinction between a beneficial ownership of a

ship and the charterer of a ship.

66. In the aforesaid context, now turning to the Arrest Convention of

1999, Article 1 specifies that the maritime claim means a claim inter

alia arising out of an agreement relating to use or hire of “the ship.”

The connotation of “the ship” would mean the 16 trawlers or the Orion

Laxmi and not the respondent ship.  Thus, there is no maritime claim

against the respondent ship.  Article 3 deals with the exercise of rights

of arrest and the eventualities are specified thereunder.  In terms of

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clause (2) of Article 3 (these Articles are reproduced in paras 25 to 27

above),  the  arrest  is  permissible  of  any  other  ship  (which  would

connote  the  respondent  ship),  which,  when the  arrest  is  effected  is

owned by the person who is liable for the maritime claim.  The liability

of the maritime claim is Reflect Geophysical and not the owners of the

respondent ship.  In terms of sub-clause (b) of clause (2) of Article 3, a

demise  charterer,  time  charterer  or  voyage  charterer  of  that  ship  is

liable.  The ship in question, as noticed above, is not the respondent but

the  16  trawlers  or  the  Orion  Laxmi.   In  view  of  the  discussion

aforesaid, really speaking Reflect Geophysical cannot be said to be the

beneficial  owner  in  the  capacity  of  a  demised  charterer  of  the

respondent  ship.   Reflect  Geophysical  is  not  the  owner  of  the

respondent ship and the owner cannot be made liable for a maritime

claim, which is against the trawlers and Orion Laxmi.

67. We may also note that in the 2017 Act in India clause 5(b) states

as under:

“5. Arrest of  vessel  in rem.—(1) The High Court  may order arrest  of  any  vessel  which  is  within  its  jurisdiction  for  the purpose of providing security against a maritime claim which is the  subject  of  an  admiralty  proceeding,  where  the  court  has reason to believe that—

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xxxx xxxx xxxx xxxx xxxx

(b)  the  demise  charterer  of  the  vessel  at  the  time  when  the maritime claim arose is liable for the claim and is the demise charterer or the owner of the vessel when the arrest is effected; or”

68. The  aforesaid  is  in  consonance  with  Article  3  of  the  1999

Convention and, thus, must be read in that context (incidentally the

Bill was introduced on 21.11.2016 and passed by the Lok Sabha and

the  Rajya  Sabha  on  10.3.2017  and  24.7.2017  respectively.   It  was

published in the Gazette on 9.8.2017 but is  still  not  notified).   The

incident in this question is, thus, prior to beginning of this exercise.

The expression  “the  vessel”,  “owner”  and “demise  charterer”,  thus,

must  be  read  in  the  aforesaid  context  and  the  maritime  claims  in

respect  of  16 trawlers and Orion Laxmi cannot be converted into a

maritime  claim  against  the  respondent  ship  not  owned  by  Reflect

Geophysical.

69. The appellants have neither any agreement with the owners of

the respondent vessel nor any claim against the respondent vessel but

their claim is on account of their own vessels hired by the charterer of

the respondent vessel.   There is no claim against the owners of the

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respondent vessel.

70. The  result  of  the  aforesaid  is  that  the  appeals  are  dismissed

leaving the parties to bear their own costs.

71. The  interim  order  dated  17.5.2013  stands  dissolved  and  the

amount along with accrued interest thereon is to be remitted back to

the owners of the respondent vessel, who deposited the same before the

Bombay High Court in pursuance of the interim order.

..….….…………………….J.     (J. Chelameswar)

              ...……………………………J.         (Sanjay Kishan Kaul)

New Delhi. March 09, 2018.

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